Does anyone know how Morgana changed his appearance during the first palace?

Why and how? Also, why morgana even has an outfit while we are in the metaverse? I mean, he did say "Basically, the Treasure changes the shape of things. Once that's gone, that power no longer works."

does that mean the treasure is the cause for their outfits while they are inside the cognitive world? And here I thought it was because of the distortion...